The post below is republished courtesy of Trader Mark, writer of the Fund My Mutual Fund blog (hat tip: Damien Hoffman of Wall St Cheat Sheet).

Societe Generale’s Albert Edwards is generally considered an uber bear, although there were times in the past year he has tactically increased exposure to equities to take advantage of oversold conditions. Now is not one of those times. In fact, Edwards chimes in with many similar thoughts we’ve posted on the fundamentals … but sticks his neck out calling for new lows in 2010.

While the belief from this blog writer is this will all end badly, knowing when and how will be the ultimate question. Without the massive intervention by central banks and governments we’d have a different landscape; and without knowing to what lengths these people will continue to go to, it’s much more difficult to predict the intermediate

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Daniel Gross (Newsweek): The greatest trade ever, November 10, 2009. How hedge fund manager John Paulson bet against the real estate bubble and made $15 billion in a single year.

• abc News: SocGen’s top analyst sees market lows next year, November 9, 2009. Albert Edwards, a top analyst with French bank Societe Generale, expects global markets to hit a new low in 2010, adding that he would not be surprised if the global economy enters another recession next year. Edwards, one of the leading equities bears and a long-term critic of the policies of Western central banks, is skeptical of popular opinion that extreme policy response will safeguard the West against a repeat of Japan’s lost decade of the 1990’s.

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Albert Edwards, London-based strategist of Société Générale, has always been a firm favourite among Investment Postcards’ readers. His latest research report appeared earlier this week and saw him remaining firmly in the bearish camp.

Edwards’s “Global Strategy” report is subtitled “Money makes the world go round down” and argues that monetary stimulus will have only a limited impact in reviving the global economy. “Massive quantitative easing (QE) around the world has undoubtedly melted the clots of some of the most clogged arteries of the global financial system. That has made things less worse, which is not the same as better,” said Andrews.

Edwards highlights that debt aversion is causing bank lending and the money supply to slump (outside of China) and he has difficulty to see a

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Risk aversion has re-entered the investment equation with risky assets such as equities and commodities bearing the brunt of the selling orders, while gold bullion, government bonds, the US dollar and the yen are attracting safe-haven money.

The global stock market pullback seems to be gathering momentum with three markets on my radar screen now trading below their 50-day moving averages, indicating a reversal of the secondary trend. These markets are China, Hong Kong and Chile, with most others uncomfortably close to this intermediate support level (see table below). I am of the opinion that more markets will fall below the 50-day lines and that we will at least see some degree of reversion to the key 200-day moving averages (often used to distinguish between primary bull and bear markets). The table provides the key levels, as well as the declines since the recent highs.

Click here

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Albert Edwards, global strategist of Société Générale, has always been a firm favourite among readers of Investment Postcards. His latest “Global Strategy Weekly” offers thought-provoking reading at a critical juncture in financial markets. The paragraphs below come courtesy of Tyler Durden of Zero Hedge.

Not only does Edwards, who was previously vilified then praised for calling the 1997 Asian Bubble, see a significant drop in equities before the end of the year, but his main concern is also every optimist’s greatest green shoot: China.

“Most areas in the markets have now discounted a V-shaped recovery. Any doubt will trigger a rapid reversal in prices. I continue to be extremely sceptical and see recent events as part of a 1930s-like, long march to revulsion. Talking about long marches, nowhere in the world fills me with more scepticism than the Chinese economic recovery. The continued enthusiasm for

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By Edward Hugh: Barcelonabr /br /blockquote"As long as excessive debt is not digested, both monetary and fiscal policies are inefficient. There is not much of an alternative. Either to let the economy collapse, in order to reduce debts, and then use fiscal policy to revive it, or inundate the insolvent economy with public credit, to avoid the collapse, and loose the ability of fiscal policy to pull it out of a prolonged lethargy. Either a horrible end or an endless horror."br /a href="http://blogs.ft.com/maverecon/2009/06/after-the-crisis-macro-imbalance-credibility-and-reserve-currency/"After the Crisis: Macro Imbalance, Credibility and Reserve-Currency/a: André Lara Resende/blockquotebr /Well, I think the title to this post makes my view on the high-profile shenanigans we are currently witnessing on the part of two widely respected contemporary intellectuals clear enough, even if Paul would probably respond that he is perfectly well able to take care of himself, thank you very much. Nonetheless, looking at the way the ...

Is the bull back? Not so fast, according to market history.

The MSCI World Index and the S&P 500 Index just posted their best monthly gains since April 2003, gaining 10.9% and 9.4%, respectively. Credit spreads or the difference between super-safe Treasury bonds and riskier bonds saw premiums plunge last month while 90-day LIBOR rates rallied from 1.19% on March 31 to 1.02% yesterday.

Indeed, even the most adamant bear would have to consign some flexibility to this rally, which has swallowed most asset classes since March 9. Stocks, non-Treasury bonds, most commodities and REITs have all participated in a broad-based rally over the last seven weeks.

But before popping the champagne, let’s not forget that back in early March stocks were pricing in a depression following a stunning 58% peak-to-trough collapse since October 2007. Banks have led this rally since March 9 (+76%) and the same banks will be responsible for

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Albert Edwards, London-based strategist of Société Générale, has always been a firm favourite among Investment Postcards’ readers. His latest research report appeared a few days ago and saw him firmly back in the bear camp after turning short-term bullish at the end of October. (See the previous posts “Albert Edwards: Turning More Bullish” [October 24] and “Market Fundamentals are Appalling” [July 5]).

Edwards’s “Global Strategy” report is sub-titled “Technicals say it is time to bail out. Cut exposure and prepare for rout. US depression looking likely. China’s 2009 implosion could get ugly.” The summary below provides the gist of his thinking.

“After increasing our equity exposure at the end of October we believe that

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If you’re thinking of getting back into stocks, it’s better to arrive late than too early says Ben Traynor. Yes, losses this year have been spectacular. And the temptation to bargain hunt is strong. But Ben says investors should remember that they still have a once-in-a-lifetime opportunity to lose a lot of money very quickly.

This from Fleet Street Daily:

I attended a most interesting lecture last night at the London School of Economics. It left me feeling that anyone who rushes back into the stock market now must be barking mad (you’ll see why in a moment).

Entitled ‘The Subprime Crisis’, it was given by Professor Robert Shiller of Yale. Shiller’s well worth hearing on this stuff. A former advisor to new US Treasury boss Tim Geithner (“He had no idea this was coming”), Shiller forewarned of both the dotcom bubble and the more recent one in housing.

The lecture kicked off with

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Not too long ago it seemed that everybody loved China.  It was a panacea, a magic bullet, the answer to every question. How can the US avoid recession? China.Why are the stock markets racing higher? China. Why is oil over $140 a barrel? China.You may have noticed that all this cheerleading has gone very quiet, very quickly.

The economists that prophesied China would become the world’s biggest economy by 2015 have changed their tune. Those that recommended investing in China have quickly gone broke.

Believe it or not, China could be next on the credit crunch’s hit list.

The City still doesn’t buy it though. To quote arch-bear Albert Edwards:

“The consensus still touchingly believes that despite a deep economic downturn in developed economies, continued rapid emerging market growth will keep overall world growth resilient.

“My view is that outright contraction of global growth is entirely possible next year.”

I think he’s right. A sharp slowdown

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